Casey’s General Stores, Inc. ("Casey's" or the "Company")
(Nasdaq symbol CASY) one of the leading convenience store chains in
the United States, today announced financial results for the three
and nine months ended January 31, 2021.
Third Quarter Key Highlights
- Diluted EPS of $1.04 compared to $0.91 for the same period a
year ago, an increase of 14%.
- Fuel gross profit increased 37% with a fuel margin of 32.9
cents per gallon. Fuel same-store gallons sold decreased 12.1%
compared to the same period last year.
- Inside same-store sales increased 2.1% compared to prior year
with a margin of 39.6%.
- Digital sales increased 95% compared to prior year. Casey’s
Rewards now exceeds 3.3 million members.
- Casey's private label surpassed 3% of grocery and other
merchandise share at quarter's end.
“Casey’s grew diluted earnings per share in the third quarter
despite a challenging, COVID-19 impacted environment,” said Darren
Rebelez, President and CEO. “The Company advanced several
initiatives in our grocery and other merchandise category that
contributed to positive inside sales volume in the quarter and
investment in our fuel capabilities yielded favorable results. We
continue to effectively manage discretionary operating expenses
while investing in our team members' and guests' safety. Our
balance sheet remains strong, and we are committed to executing our
long-term strategic plan.”
Earnings
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Net income (in thousands)
$
38,627
$
33,959
$
271,202
$
201,755
Diluted earnings per share
$
1.04
$
0.91
$
7.28
$
5.43
Adjusted EBITDA (in thousands)
$
127,382
$
120,391
$
588,368
$
491,175
Net income, diluted EPS, and Adjusted EBITDA (reconciled later
in the document) in the third quarter were greater than prior year
due to higher fuel margin and decreased interest expense, partially
offset by lower inside gross profit and higher operating expenses.
The Company operated 36 more stores than the prior year period.
Fuel
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Fuel gallons sold (in thousands)
518,408
572,746
1,645,497
1,805,901
Same-store gallons sold
(12.1
)%
(2.0
)%
(11.9
)%
(2.0
)%
Fuel gross profit (in thousands)
$
170,399
$
124,257
$
584,584
$
416,045
Fuel margin (cents per gallon, excluding
credit card fees)
32.9
¢
21.7
¢
35.5
¢
23.0
¢
Same-store gallons sold were adversely impacted by lower guest
traffic due to the COVID-19 pandemic. The Company’s overall fuel
gross profit was 37% higher than the previous third quarter, driven
in part by Casey's centralized fuel team and its ability to
navigate the complex environment within the fuel marketplace. The
Company sold $6.9 million in renewable fuel credits in the third
quarter, an increase of $5.2 million from the prior year.
Inside
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Inside sales (in thousands)
$
888,483
$
856,037
$
2,898,157
$
2,798,239
Inside same-store sales
2.1
%
3.3
%
1.6
%
2.8
%
Grocery and other merchandise same-store
sales increase
5.4
%
3.5
%
5.1
%
3.2
%
Prepared food and fountain same-store
sales (decrease) increase
(5.0
)%
2.8
%
(6.1
)%
2.1
%
Inside gross profit (in thousands)
$
351,490
$
356,487
$
1,161,390
$
1,157,537
Inside margin
39.6
%
41.6
%
40.1
%
41.4
%
Grocery and other merchandise margin
30.7
%
32.9
%
32.1
%
32.5
%
Prepared food and fountain margin
60.6
%
60.2
%
60.1
%
61.1
%
Inside same-store sales were driven by strong performance in
alcohol, packaged beverages, and whole pizza pies, offset by
weakened demand in the bakery and dispensed beverage categories.
Inside margin was adversely impacted by mix shift, both within and
across categories. In addition, the Company discounted select
merchandise in conjunction with a major store reset that took place
throughout the chain in the third quarter. The reset expanded
selling space throughout the store to drive key categories,
optimized category flow and adjacencies, and enabled the rapid
expansion of our private brand program.
Operating
Expenses
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Operating expenses (in thousands)
$
414,448
$
377,330
$
1,210,884
$
1,130,554
Credit card fees (in thousands)
$
34,365
$
35,570
$
108,385
$
114,656
Same-store operating expense excluding
credit card fees
5.6
%
5.4
%
1.8
%
3.8
%
Operating expenses for the third quarter were up primarily due
to operating 36 more stores than this time last year, as well as
incurring $11 million in COVID-19 related expenses, $10 million in
incremental incentive compensation due to strong financial
performance of the Company, $3 million in labor costs associated
with the major store reset noted above, offset by a reduction in
credit card fees and a 5% reduction in same-store labor hours,
after adjusting for the store reset and COVID-19 related pay.
Expansion
Store Count
Stores at 4/30/2020
2,207
New store construction
27
Acquisitions
3
Acquisitions not opened
(2)
Prior acquisitions opened
2
Closed
(8)
Stores at 1/31/2021
2,229
In connection with the previously disclosed pending Buchanan
Energy acquisition, Casey's and Buchanan Energy received a Request
for Additional Information from the Federal Trade Commission
("FTC"). Casey's is cooperating with the FTC and does not expect
its review to have a material impact on the acquisition. The
Company also expects to complete the construction of approximately
40 new stores this fiscal year.
Liquidity At January 31, the
Company had approximately $865 million in available liquidity,
consisting of approximately $390 million in cash and cash
equivalents on hand and $475 million in undrawn borrowing capacity
on existing lines of credit. During the quarter, the Company
amended its existing Credit Agreement to include a term loan of up
to $300 million. The term loan along with existing cash and lines
of credit, will be used to fund the pending Buchanan Energy
acquisition.
Share Repurchase The Company
has $300 million remaining under its existing share repurchase
program which expires in April 2022. There were no repurchases made
against that authorization in the third quarter.
Dividend At its March
meeting, the Board of Directors voted to pay a quarterly dividend
of $0.34 per share. The dividend is payable May 17, 2021 to
shareholders of record on May 3, 2021.
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Income
(Dollars in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Total revenue
$
2,008,028
$
2,248,198
$
6,328,954
$
7,362,413
Cost of goods sold (exclusive of
depreciation and amortization, shown separately below)
1,467,847
1,751,335
4,533,510
5,742,799
Operating expenses
414,448
377,330
1,210,884
1,130,554
Depreciation and amortization
65,185
63,285
195,299
185,981
Interest, net
11,469
13,209
35,510
39,613
Income before income taxes
49,079
43,039
353,751
263,466
Federal and state income taxes
10,452
9,080
82,549
61,711
Net income
$
38,627
$
33,959
$
271,202
$
201,755
Net income per common share
Basic
$
1.04
$
0.92
$
7.33
$
5.47
Diluted
$
1.04
$
0.91
$
7.28
$
5.43
Basic weighted average shares
37,042,544
36,920,960
37,017,656
36,901,338
Plus effect of stock compensation
241,047
221,917
240,962
221,187
Diluted weighted average shares
37,283,591
37,142,877
37,258,618
37,122,525
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(Dollars in thousands)
(Unaudited)
January 31, 2021
April 30, 2020
Assets
Current assets
Cash and cash equivalents
$
388,946
$
78,275
Receivables
66,617
48,500
Inventories
271,421
236,007
Prepaid expenses
17,794
9,801
Income taxes receivable
—
14,667
Total current assets
744,778
387,250
Other assets, net of amortization
78,210
71,766
Goodwill
161,075
161,075
Property and equipment, net of accumulated
depreciation of $2,151,436 at January 31, 2021 and $2,037,708 at
April 30, 2020
3,412,924
3,323,801
Total assets
$
4,396,987
$
3,943,892
Liabilities and Shareholders’
Equity
Current liabilities
Lines of credit
$
—
$
120,000
Current maturities of long-term debt and
finance lease obligations
2,327
570,280
Accounts payable
332,103
184,800
Accrued expenses
245,519
188,348
Income taxes payable
1,877
—
Total current liabilities
581,826
1,063,428
Long-term debt and finance lease
obligations, net of current maturities
1,362,076
714,502
Deferred income taxes
449,152
435,598
Deferred compensation
14,636
13,604
Insurance accruals, net of current
portion
21,103
22,862
Other long-term liabilities
74,605
50,693
Total liabilities
2,503,398
2,300,687
Total shareholders’ equity
1,893,589
1,643,205
Total liabilities and shareholders’
equity
$
4,396,987
$
3,943,892
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Nine months ended January 31,
2021
2020
Cash flows from operating activities:
Net income
$
271,202
$
201,755
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
195,299
185,981
Amortization of debt issuance costs
1,258
—
Share-based compensation
22,009
14,394
Loss on disposal of assets and impairment
charges
3,808
2,115
Deferred income taxes
13,554
39,454
Changes in assets and liabilities:
Receivables
(18,117
)
(8,527
)
Inventories
(35,238
)
10,207
Prepaid expenses
(7,993
)
(6,937
)
Accounts payable
124,026
(53,534
)
Accrued expenses
56,228
12,737
Income taxes
18,363
9,204
Other, net
18,680
(7,142
)
Net cash provided by operating
activities
663,079
399,707
Cash flows from investing activities:
Purchase of property and equipment
(263,077
)
(363,907
)
Payments for acquisition of businesses,
net of cash acquired
(5,780
)
(12,644
)
Proceeds from sales of property and
equipment
4,823
3,813
Net cash used in investing activities
(264,034
)
(372,738
)
Cash flows from financing activities:
Proceeds from long-term debt
650,000
—
Payments of long-term debt
(570,999
)
(9,329
)
Payments of debt issuance costs
(5,525
)
—
Net (payments) borrowings of short-term
debt
(120,000
)
1,000
Proceeds from exercise of stock
options
1,665
2,392
Payments of cash dividends
(35,410
)
(34,178
)
Tax withholdings on employee share-based
awards
(8,105
)
(6,611
)
Net cash used in financing activities
(88,374
)
(46,726
)
Net increase (decrease) in cash and cash
equivalents
310,671
(19,757
)
Cash and cash equivalents at beginning of
the period
78,275
63,296
Cash and cash equivalents at end of the
period
$
388,946
$
43,539
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
INFORMATION
Nine months ended January 31,
2021
2020
Cash paid during the period for:
Interest, net of amount capitalized
$
32,862
$
33,636
Income taxes, net
48,137
10,800
Noncash investing and financing
activities:
Purchased property and equipment in
accounts payable
28,605
9,813
Non-cash additions from adoption of ASC
842
—
22,635
Summary by Category
(Amounts in thousands)
Three months ended January 31,
2021
Fuel
Grocery & Other
Merchandise
Prepared Food &
Fountain
Other
Total
Revenue
$
1,100,875
$
624,465
$
264,018
$
18,670
$
2,008,028
Gross profit
$
170,399
$
191,502
$
159,988
$
18,292
$
540,181
15.5
%
30.7
%
60.6
%
98.0
%
26.9
%
Fuel gallons sold
518,408
Three months ended January 31, 2020
Revenue
$
1,376,018
$
582,407
$
273,630
$
16,143
$
2,248,198
Gross profit
$
124,257
$
191,692
$
164,795
$
16,119
$
496,863
9.0
%
32.9
%
60.2
%
99.9
%
22.1
%
Fuel gallons sold
572,746
Summary by Category
(Amounts in thousands)
Nine months ended January 31,
2021
Fuel
Grocery & Other
Merchandise
Prepared Food &
Fountain
Other
Total
Revenue
$
3,380,348
$
2,074,552
$
823,605
$
50,449
$
6,328,954
Gross profit
$
584,584
$
666,093
$
495,297
$
49,470
$
1,795,444
17.3
%
32.1
%
60.1
%
98.1
%
28.4
%
Fuel gallons sold
1,645,497
Nine months ended January 31, 2020
Revenue
$
4,518,061
$
1,930,886
$
867,353
$
46,113
$
7,362,413
Gross profit
$
416,045
$
627,278
$
530,259
$
46,032
$
1,619,614
9.2
%
32.5
%
61.1
%
99.8
%
22.0
%
Fuel gallons sold
1,805,901
Fuel Gallons
Fuel Margin
Same-store Sales
(Cents per gallon, excluding
credit card fees)
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2021
(14.6
)%
(8.6
)%
(12.1
)%
—
—
F2021
38.2
¢
35.3
¢
32.9
¢
—
—
F2020
(2.0
)
(1.8
)
(2.0
)
(14.7
)%
(5.1
)%
F2020
24.4
22.9
21.7
40.8
¢
26.8
¢
F2019
0.5
(1.1
)
(3.4
)
(2.8
)
(1.7
)
F2019
20.5
20.0
22.1
18.6
20.3
Grocery & Other
Merchandise
Grocery & Other
Merchandise
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2021
3.6
%
6.6
%
5.4
%
—
—
F2021
32.2
%
33.3
%
30.7
%
—
—
F2020
3.2
3.2
3.5
(2.0
)%
1.9
%
F2020
31.3
33.3
32.9
30.4
%
32.0
%
F2019
3.2
2.7
3.4
5.7
3.6
F2019
32.4
32.4
31.9
31.5
32.1
Prepared Food &
Fountain
Prepared Food &
Fountain
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2021
(9.8
)%
(3.6
)%
(5.0
)%
—
—
F2021
59.7
%
60.1
%
60.6
%
—
—
F2020
1.6
1.9
2.8
(13.5
)%
(1.5
)%
F2020
62.2
60.9
60.2
60.0
%
60.9
%
F2019
1.7
2.2
1.5
2.0
1.9
F2019
62.0
62.4
62.3
62.2
62.2
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED
EBITDA
We define EBITDA as net income before net interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA
further adjusts EBITDA by excluding the gain or loss on disposal of
assets as well as impairment charges. Neither EBITDA nor Adjusted
EBITDA are considered GAAP measures, and should not be considered
as a substitute for net income, cash flows from operating
activities or other income or cash flow statement data. These
measures have limitations as analytical tools, and should not be
considered in isolation or as substitutes for analysis of our
results as reported under GAAP. We strongly encourage investors to
review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
We believe EBITDA and Adjusted EBITDA are useful to investors in
evaluating our operating performance because securities analysts
and other interested parties use such calculations as a measure of
financial performance and debt service capabilities, and they are
regularly used by the Company for internal purposes including our
capital budgeting process, evaluating acquisition targets,
assessing performance, and awarding incentive compensation.
Because non-GAAP financial measures are not standardized, EBITDA
and Adjusted EBITDA, as defined by us, may not be comparable to
similarly titled measures reported by other companies. It therefore
may not be possible to compare our use of these non-GAAP financial
measures with those used by other companies.
The following table contains a reconciliation of net income to
EBITDA and Adjusted EBITDA for the three and nine months ended
January 31, 2021 and 2020:
(In thousands)
Three Months Ended January
31,
Nine Months Ended January 31,
2021
2020
2021
2020
Net income
$
38,627
$
33,959
$
271,202
$
201,755
Interest, net
11,469
13,209
35,510
39,613
Depreciation and amortization
65,185
63,285
195,299
185,981
Federal and state income taxes
10,452
9,080
82,549
61,711
EBITDA
$
125,733
$
119,533
$
584,560
$
489,060
Loss on disposal of assets and impairment
charges
1,649
858
3,808
2,115
Adjusted EBITDA
$
127,382
$
120,391
$
588,368
$
491,175
NOTES:
- Gross Profit is defined as revenue less cost of goods sold
(exclusive of depreciation and amortization)
- Inside is defined as the combination of Grocery and Other
Merchandise and Prepared Food and Fountain
This release contains statements that may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including those related
to the pending Buchanan Energy acquisition, expectations for future
periods, possible or assumed future results of operations,
financial conditions, liquidity and related sources or needs,
business and/or integration strategies, plans and synergies, supply
chain, growth opportunities, performance at our stores, and the
potential effect of COVID-19. There are a number of known and
unknown risks, uncertainties, and other factors that may cause our
actual results to differ materially from any future results
expressed or implied by those forward-looking statements, including
but not limited to the timing and integration of the pending
Buchanan Energy acquisition, executing our strategic plan, the
impact and duration of COVID-19 and related governmental actions,
as well as other risks, uncertainties and factors which are
described in the Company’s most recent annual report on Form 10-K
and quarterly reports on Form 10-Q, as filed with the Securities
and Exchange Commission and available on our website. Any
forward-looking statements contained in this release represent our
current views as of the date of this release with respect to future
events, and Casey’s disclaims any intention or obligation to update
or revise any forward-looking statements in the release whether as
a result of new information, future events, or otherwise.
Corporate information is available at this website: https://www.caseys.com. Earnings will be reported
during a conference call on March 9, 2021. The call will be
broadcast live over the Internet at 7:30 a.m. CST. To access the
call, go to the Events and Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx.
No access code is required. A webcast replay of the call will
remain available in an archived format on the Events and
Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx
for one year after the call.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210308005928/en/
Investor Relations Contact: Brian Johnson (515)
965-6587
Media Relations Contact: Katie Petru (515)
446-6772
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